|South Mountain Crossing Monument Sign|
South Mountain Crossing—a 130,200 ft2 partially-complete neighborhood shopping center at the northwest corner of Southern and 35th Avenues in Phoenix—was acquired by Lamar Companies of Fairfield, Connecticut on Friday for $11,172,825. The seller was RN Properties South Mountain, LLC, a single-purpose entity comprised of Arte Moreno, Joe Fitzgerald, James Shough and Bill Beverage. The existing plat for South Mountain Crossing calls for an additional 92,898 ft2 of retail development on the remaining 8.22 acres of undeveloped pad space.
The neighborhood shopping center was previously anchored by Mervyns Department Store, which was subsequently demised into two junior anchor spaces, one of which is occupied by C-A-L Ranch Stores. In addition to the 81,200 ft2 of combined anchor space, there is a 9,270 ft2 inline space adjacent to the anchor and another 39,790 ft2 of freestanding multi-tenant retail space in four buildings. The aforementioned 8.22 acres of undeveloped pad space is demised into five lots. The project sits on 25.84 acres of R1-4 zoning and was actively developed in 2007 and 2008 before going into foreclosure.
|South Mountain Crossing Inline Portion|
The land on which the project sits was previously acquired in September 2006 for $8,578,160 or $7.68 per square foot. A $37.372m construction deed of trust was taken out against the property and a ground lease with US Bank was entered into in January of 2007 for twenty five years with four five year options to extend. Following an extension of the maturity date on the Lasalle Bank note, the property was noticed for trustee sale and reverted to an entity controlled by Bank of America, Compass Bank and US Bank with a $13.547m credit bid.
The current sellers acquired title for $6.05m at a February 2012 bank sale allocated as $2.2m for the built property and the US Bank ground lease and $3.85m for the undeveloped pads. In December of 2013, the new owners sold the US Bank ground lease for $3.458m or $691.60 per square foot, reported at that time to be a 5.25% cap rate. On Friday—after slightly less than two and a half years—the ownership group was able to sell the as yet incomplete project for $11,172,485 apportioned as $747,825 down and $10.425m in new debt with Bank of the West.
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